If accounts payable have increased during a period
A) revenues on an accrual basis are less than revenues on a cash basis.
B) expenses on an accrual basis are less than expenses on a cash basis.
C) expenses on an accrual basis are greater than expenses on a cash basis.
D) expenses on an accrual basis are the same as expenses on a cash basis.

Question

Quizplus · Accepted Answer

An increase in accounts payable indicates that a company has bought goods or services on credit, meaning that the expenses have been incurred but not yet paid. This results in higher expenses on an accrual basis compared to cash basis.

If Accounts Payable Have Increased During a Period